No Exit? Greece's Ongoing Crisis
When the New Year kicked off in Athens, a pall of smoke hung over the city. Steep hikes in fuel prices had pushed people to burn wood to stay warm, and even discarded Christmas trees were being fed into the fires. At the same time, a series of small explosions targeted the offices of the two major parties, New Democracy and Pasok, as well as the residences of several prominent journalists. Most shocking of all was a series of brutal beheadings across the capital that quickly became fodder for headlines, with the victims including a former central banker, a Dutch credit ratings executive and the CEO of a small debt collection agency. Well, not quite—the beheadings are described in Lixiprothesma daneia (Expiring Loans), the first novel in a new crisis trilogy by the leading Greek crime writer, Petros Markaris, whose detective hero, Inspector Costas Haritos, is as shrewd a reader of the mood in Athens as anyone. Greece is now sunk in its sixth straight year of recession, and with social and political disintegration reaching extremes not seen since World War II, it is no longer easy to separate fact from fiction.
Hard though it is to believe, around four years ago commentators and politicians were expressing relief that Greece, like the rest of Europe, had managed to escape the worst of the financial crisis. There were good reasons to be cautiously optimistic: the country’s ratio of debt to GDP had worsened a bit but not substantially, and levels of personal indebtedness were relatively low by international standards. There was no looming mortgage crisis on an American or even a Dutch or Irish scale. (The growth in housing prices in Greece between 1996 and 2008 was only 80 percent compared with 170 percent in Ireland, for instance.) Yet in the six months following the summer of 2009, everything unraveled with bewildering speed, catching the Greeks—and the rest of the world—by surprise. Following the elections that autumn, the incoming government of George Papandreou’s socialist Pasok party announced that the books had been cooked and the country’s plight far worse than anyone had foreseen. Then the credit ratings agencies piled in, downgrading Greek bonds and helping to send the government’s borrowing costs through the roof. As the panic spread, negotiations got under way among Greece, the European Union and the IMF, and the first in a series of bailouts was negotiated in exchange for the imposition of austerity.
Since then, Pasok has fallen from power and all but imploded. The government is now headed by the center-right party New Democracy; meanwhile Syriza, a coalition grouped around the old Euro-communist left (and once a happy member of the radical fringe), finds itself occupying the unaccustomed role of official opposition, and a thuggish neo-Nazi party called Golden Dawn sits third in the polls. Greece remains a member of the eurozone, but at an exorbitant cost: three years into the austerity regimen, the country’s unemployment is likely the highest in the EU at 27 percent, with youth unemployment exceeding 60 percent. Reports suggest that one out of three Greek households is living in poverty. Greece has become the epicenter of the worst crisis of capitalism since the interwar depression.
Rather in the spirit of Neville Chamberlain, who in 1938 expressed consternation at the prospect of a really important nation like Britain being plunged into a European war because of a “quarrel in a faraway country between people of whom we know nothing,” commentators outside Greece have been alarmed that the debt problems of a country whose GDP makes up less than 3 percent of the entire eurozone could become an international issue of such consequence. But how could they have been surprised? What’s happening in Greece is the dark side of the extreme globalization of finance that began in the 1990s and accelerated in Europe with the creation of the euro. Their surprise is part of a more profound ignorance exposed by the crisis: as financial globalization has accelerated, our knowledge of the world and its interlocking parts—political, financial, economic—has failed to keep pace.
For months, the European media’s chief response to the eurozone’s travails seemed to be facilitating a mudslinging match between creditor and debtor nations, and even now the scale of mutual incomprehension remains staggering. But the ignorance is not Europe’s alone: as a long line of debt crises dating back to the 1980s has shown, nothing reveals the superficiality of Western “knowledge” of the globe better or more painfully than when some stricken nation finds itself obliged to go cap in hand to the IMF and other international creditors, and to hear what their economists in particular have to say. In 2010, representatives of the so-called troika (the IMF, the European Commission and the European Central Bank) had to make a quick diagnosis of the roots of the Greek predicament in order to devise a cure, and the country has been suffering ever since. At the same time, foreign journalists passing through Athens have provided their own very partial story lines, focusing on corruption and malfeasance and the strains of a bloated public sector.
What the Greeks have thought about their situation, on the other hand, is not a subject that has bothered many people outside the country. Photographers flock to the demonstrations, capturing confrontations between the populace and the police in Syntagma Square in Athens and snapping photos of protesters with handmade placards likening German Chancellor Angela Merkel, austerity’s most hard-nosed advocate, to Hitler. Journalists focus on the rise of the extreme right and the appalling treatment of immigrants, or for contrast and local color file stories about aged and ruddy islanders whom the crisis seems to have passed by. In consequence, the country’s enormous resilience, and the strength of the popular desire to remain within the euro, almost at all costs, have been systematically underestimated.
What has also gone unnoticed abroad is the stream of high-quality books and essays about the present crisis that have been published in Greek. For all its many calamities, the country still possesses a cosmopolitan cultural and intellectual elite, widely read in most major languages. Economics flourishes as a discipline, retaining connections to politics and the social sciences that have disappeared in the United States. (It has also been the professional proving ground of most of the country’s recent finance ministers.) Economists in Greece still engage seriously with the Marxist inheritance, as tends to be the case in countries that cannot afford to take capitalism’s merits for granted. And political satire and social critique are alive and well, as Markaris’s Lixiprothesma daneia, among others, suggests. Reading some of these recent Greek-language publications, one finds a far richer and more nuanced picture of the crisis starting to emerge than anything currently found on this side of the Atlantic.
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